I am currently assisting family members in negotiating mineral leases for their properties. Does anyone have any experience or information regarding lease option payments, going royalty rates or other information?
Mr. Brown,
The Hastings field, East or West, is in its failing stages of primary production. Denbury Green is running a CO2 line to do a miscible gas flood.
Be VERY careful what you do. Be very cautious of lease provisions.
Here is what I suspect:
Denbury will want you sign a lease that agrees to field wide unitization. The problem is that if they control all of the leases and they are on their lease form, you have agreed to the large unit.
NOW, that is not necessarily bad, but you would want to determine the ratio of net acre feet of pay under the family property to the net acre feet of the field(s). Then you do the same exercise based on surface acreage. That, I am pretty sure, is what Denbury will want to do.
Likely Denbury will also want to have the right to inject and STORE CO2 with no price paid to the surface owner whatsoever.
The East Hastings is separated from the West Hastings by a fault. I want to say that Hastings has produced about 3/4 of a billion bbls. If Denbury can extract another 10%, that is 75 million bbls. At 100/bbl, you can see the gross value. At very little risk. The oil is there. The technology is there.
You are on the cutting edge of all of this. A bill is in the house right now to confiscate the ability of Texans to make their own decision on field wide unitization. Go here for the report of my first reading of he bill:
When Denbury comes calling, send me a copy of the lease they propose. Please. I am DYING to see it.
Buddy,
We currently have a lease offer in hand and having our first meeting very soon. I have to ask permission to share the lease but do not wish the lease offer be made public. Is there a way I could share directly only with you once I receive permission?
Dear Barry,
Have they told you that you could not share the lease with friends or advisers? I would not even ask them permission. You do not need to make it public. Contact me through my website.
Kenny and R. T. Don't get upset, I am not EVEN soliciting business from Mr. Brown. I have been working behind the scenes against forced field wide unitization for over a year. I just want to see what type of lease form they come up with. I want to find out their true intentions.
Buddy: If I may piggyback on Mr. Brown’s topic, I would like to know if you have any info on the nearby Friendswood field operated by Exxon. It is an old field, located in SE Harris County, but still producing and HBP. We are in a Unit and I know that Exxon has recently announced a CO2 program in properties they have in the Permian Basin and appears to be interested in reworking old fields. I am wondering if the Friendswood Field is a candidate for this type of enhanced recovery as I think it would have similarities to the Hasting’s field.
Sure, Mike.
Friendswood is no Hastings. Friendswood has multiple faults rather than essentially one big ass expansion fault. Frio Field. In the early days it was called the Webster Field. It is truly a candidate for FWU. Gas may not be the best injection medium - leave that to the engineers to determine for sure. Friendswood is a combination drive, both gas cap and water drive. I read an abstract some years ago where it said that tertiary would recover another 40 mmbo.
Thanks Buddy: We are in what is called “The Webster Field Unit” I have always thought the field would be a candidate for EOR some day.
Just received an offer for $200/acre and 20% royalty near Damon in Brazoria County.
Buddy,
To tag onto the "Webster Field" part of this old discussion; our family has royalty interests in the Webster Field Unit in both Harris & Galveston Counties. Has there been more recent talk about any EOR in the area?
We have been approached again by those looking to buy our interests.
Buddy Cotten said:
Sure, Mike.
Friendswood is no Hastings. Friendswood has multiple faults rather than essentially one big ass expansion fault. Frio Field. In the early days it was called the Webster Field. It is truly a candidate for FWU. Gas may not be the best injection medium - leave that to the engineers to determine for sure. Friendswood is a combination drive, both gas cap and water drive. I read an abstract some years ago where it said that tertiary would recover another 40 mmbo.
Buddy Cotten
Mr. Walker: I have been monitoring the activities, as much as possible, of Denbury's operation in the Webster Field Unit. They have permitted many wells already in the northernmost section of the Unit. I have not heard a word about whether or not they have completed the CO2 pipeline from the Hastings Field. They were projected to begin CO2 flooding in 2015. Whether or not they will maintain this schedule with the oil price downturn remains to be seen. They have announced about a 50% cutback in capex. I am hopeful they will remain on schedule. We are in Tract 39 of WFU. That is also part of the Harris/Galveston County area. As to these royalty buyout offers I have instructed all our extended Family members to discard these solicitations. The values offered are typically pennies on the dollar as to potential payout. We are receiving these solicitations frequently these days and I have even received phone solicitations which I find unusual.
W. Walker said:
Buddy,
To tag onto the "Webster Field" part of this old discussion; our family has royalty interests in the Webster Field Unit in both Harris & Galveston Counties. Has there been more recent talk about any EOR in the area?
We have been approached again by those looking to buy our interests.
Buddy Cotten said:Sure, Mike.
Friendswood is no Hastings. Friendswood has multiple faults rather than essentially one big ass expansion fault. Frio Field. In the early days it was called the Webster Field. It is truly a candidate for FWU. Gas may not be the best injection medium - leave that to the engineers to determine for sure. Friendswood is a combination drive, both gas cap and water drive. I read an abstract some years ago where it said that tertiary would recover another 40 mmbo.
Buddy Cotten
Buddy, Thank you very much for your response and information.
Mike Igau said:
Mr. Walker: I have been monitoring the activities, as much as possible, of Denbury’s operation in the Webster Field Unit. They have permitted many wells already in the northernmost section of the Unit. I have not heard a word about whether or not they have completed the CO2 pipeline from the Hastings Field. They were projected to begin CO2 flooding in 2015. Whether or not they will maintain this schedule with the oil price downturn remains to be seen. They have announced about a 50% cutback in capex. I am hopeful they will remain on schedule. We are in Tract 39 of WFU. That is also part of the Harris/Galveston County area. As to these royalty buyout offers I have instructed all our extended Family members to discard these solicitations. The values offered are typically pennies on the dollar as to potential payout. We are receiving these solicitations frequently these days and I have even received phone solicitations which I find unusual.
W. Walker said:Buddy,
To tag onto the “Webster Field” part of this old discussion; our family has royalty interests in the Webster Field Unit in both Harris & Galveston Counties. Has there been more recent talk about any EOR in the area?
We have been approached again by those looking to buy our interests.
Buddy Cotten said:Sure, Mike.
Friendswood is no Hastings. Friendswood has multiple faults rather than essentially one big ass expansion fault. Frio Field. In the early days it was called the Webster Field. It is truly a candidate for FWU. Gas may not be the best injection medium - leave that to the engineers to determine for sure. Friendswood is a combination drive, both gas cap and water drive. I read an abstract some years ago where it said that tertiary would recover another 40 mmbo.
Buddy Cotten
Dear Mr. Walker,
I saw your post by accident just a few minutes ago. I can only surmise that you bumping a three year old thread and your comment to me was intended to be a snide remark. There is no other explanation.
If you would like your questioned researched and answered, there may be some on this forum that will do it for a fee.
You also might want to read the discussion located here:
http://www.mineralrightsforum.com/forum/topics/answering-questions
Best wishes,
Buddy Cotten
W. Walker said:
Buddy, Thank you very much for your response and information.
Mike Igau said:Mr. Walker: I have been monitoring the activities, as much as possible, of Denbury's operation in the Webster Field Unit. They have permitted many wells already in the northernmost section of the Unit. I have not heard a word about whether or not they have completed the CO2 pipeline from the Hastings Field. They were projected to begin CO2 flooding in 2015. Whether or not they will maintain this schedule with the oil price downturn remains to be seen. They have announced about a 50% cutback in capex. I am hopeful they will remain on schedule. We are in Tract 39 of WFU. That is also part of the Harris/Galveston County area. As to these royalty buyout offers I have instructed all our extended Family members to discard these solicitations. The values offered are typically pennies on the dollar as to potential payout. We are receiving these solicitations frequently these days and I have even received phone solicitations which I find unusual.
W. Walker said:Buddy,
To tag onto the "Webster Field" part of this old discussion; our family has royalty interests in the Webster Field Unit in both Harris & Galveston Counties. Has there been more recent talk about any EOR in the area?
We have been approached again by those looking to buy our interests.
Buddy Cotten said:Sure, Mike.
Friendswood is no Hastings. Friendswood has multiple faults rather than essentially one big ass expansion fault. Frio Field. In the early days it was called the Webster Field. It is truly a candidate for FWU. Gas may not be the best injection medium - leave that to the engineers to determine for sure. Friendswood is a combination drive, both gas cap and water drive. I read an abstract some years ago where it said that tertiary would recover another 40 mmbo.
Buddy Cotten
Buddy, My apologies. I had mistakenly thought it was you that replied to me. It was, Mike Igau. Buddy, literally, thanks for all your input on the forum.
Mike Igau, thank you for your response to my post on a very old thread.